Lindsay Australia limited is the Horticulture company selected for my first assessment, so this is my 3rd assessment and the study should be conducted on the same company as mentioned above.I have also attached my first assessment for reference.
MGT5STR – Strategic Management Assessment 1: STRATEGIC MANAGEMENT EXECUTIVE SUMMARY The report focuses on identifying and analysing the strategic management practices of horticulture focused agribusiness in Australia to understand and implement the concepts and theories of strategic management. In order to understand these concepts, Lindsay Australia limited one of the renowned importers and exporter of horticulture goods is selected and the company’s business units, products & services are analysed along with the revenue units. The report also explores the external and internal environmental factor of the company. Some of the external factors that are analysed in the report are political, economic, social, technological, environmental and legal operating factors. For a better understanding of the internal environmental factors, the company’s resources, capabilities, core competencies and competitive advantage are analysed. All the essential aspects of strategic management practices of a company are analysed using literature study in the report and based on the analysis, few recommendations are provided explaining how the company can improve. TABLE OF CONTENTS INTRODUCTION3 AIM3 HORTICULTURE FOCUSED AGRIBUSINESS IN AUSTRALIA3 BUSINESS UNITS AND PRODUCTS & SERVICE LINES3 BUSINESS REVENUE UNITS4 IMPORTANCE OF THE LARGEST REVENUE UNITS4 EXTERNAL ENVIRONMENTAL ANALYSIS5 PESTEL Analysis:5 Political Factors:5 Economic Factors:6 Social Factors:6 Technological Factors:6 Environmental Factors:7 Legal Factors:7 INTERNAL ENVIRONMENTAL ANALYSIS7 Resources:7 Capabilities:8 Core Competencies:8 Competitive Advantage:8 CONCLUSION8 RECOMMENDATIONS9 REFERENCES10 APPENDIX12 INTRODUCTION Horticulture is one of the reputed industries in Australia for both the domestic and the international market. It is known as a sustainable manufacturer of premium safe food as the entire supply chain (Farm till the customer) is highly standardised. Australia's horticulture includes Organic products such as fruits and vegetables, nuts, flowers, turf and other nursery products. Australia significantly focuses on the tropical horticultural industry along with large irrigation organizations in the Ord river of Western Australia and the Burdekin river of Queensland. (Australian Government, 2016). Australian industry is mainly domestic market orientated. The horticulture industry avails the best product within the country instead of focusing on exporting the products. (Nichols, 2010). AIM The report aims to identify and explain the Horticulture focused agribusiness operating in Australia, understand & analyse the overall Horticulture agribusiness (External and internal environment) and to come up with the best possible recommendations to strategically guide the selected business. HORTICULTURE FOCUSED AGRIBUSINESS IN AUSTRALIA Lindsay Australia Limited one of the well-known locally owned public company. Lindsay is involved with several forms of business, but the company also deals with horticulture focused agribusiness in Australia since 1993. (IBISWorld., 1999). The company runs transportation, logistics and facilitates supply service to fresh produce, food service, rural, food processing and horticultural sectors in Australia. The rural segment is engaged in selling and distribution of a variety of agricultural supply products. The rural suppliers who are focused on the horticultural industry also enjoy the benefits of warehousing and the specialist services by the company. (Intelligent Investor.,2015). BUSINESS UNITS AND PRODUCTS & SERVICE LINES The company generates revenue from various activities or the business units such as import & export of horticulture products, rural supply merchandising and delivery of general freight & refrigerated services. Lindsay Australia Ltd works in Victoria, Queensland, South Australia, New South Wales and is regulated from its head office in Acacia Ridge, Queensland. (Lindsay Australia.2017). The company deals with various products & offers end to end services among cultivators, manufactures, markets and distribution centres. The three forms of operations are (Lindsay Australia, 2017). · Lindsay Rural - Selling the packaging materials for agricultural products, irrigation equipment, chemicals and fertilisers. · Lindsay Transport - Deals with dry, General and refrigerated transporting. · Lindsay Fresh Logistics - Storing, maturing, fumigation and import and export services of fruit and vegetables. BUSINESS REVENUE UNITS Lindsay Australia’s revenue has been on a positive side which has been improving all these years from 2014 (Please refer to appendix Table.01). The revenue units of the company are sales revenue and the other revenues. (Lindsay Australia.2018). The sales revenue includes freight cartage and products sold (Please refer to appendix Table.02). The operations within freight cartage and products sold are as follows (Please refer the Appendix figure 0.1). (Lindsay Australia.2018). 1. Lindsay Transport- Runs the overall transport activities. 2. Lindsay Rural- Operating with the Australian cultivators. 3. Lindsay Fresh Logistics- Storing and delivering. 4. Lindsay Connect- Exports the Australian produce to the world. IMPORTANCE OF THE LARGEST REVENUE UNITS According to the statistics of annual report 2018, the most substantial revenue unit of the company is the sales revenue with the highest revenue of AUD 364,479 thousand. Where in the freight cartage (AUD 250,555 thousand) plays a vital role in maximising the sales revenue. (Lindsay Australia.2018). Each operation includes the supply and delivery services between the grower, markets, manufacturer, supply channels and the other states. The Lindsay Transport makes use of refrigerated navies to supply its fresh products to farms and east coast markets. Lindsay Rural transports its cardboard packages and horticultural products supplies from Queensland’s Horticulture sector to Victoria, New South Wales, and South Australia. Lindsay Rural has also achieved the tiles as the first rural merchandise company in Australia. (Lindsay Australia.2017). EXTERNAL ENVIRONMENTAL ANALYSIS The firm finds it very difficult to understand the external environment as it involves many complexities. The firm must recognize and understand the factors affecting the external environment, such as opportunities and threats. The three key parts within the external environment are (Hitt, Ireland, Hoskisson, 2016). 1. The general environment includes factors and segments within the broader society that affects the overall industry and the competitive firms in the industry. 2. The industry environment includes competitive activities, its retorts, and the potentiality to achieve the profit. 3. Competitor environment is the environment where the firm needs to understand and analyse each of their competitors’ objectives, abilities, tactics and expectations. PESTEL Analysis: The segments within the general environment are the political, economic, social, technological, environmental and legal operating environment. This is also known as PESTEL analysis, which does not only impacts the company but the overall market. The Porters model helps in shaping the strategy and competitive scale, which is explained through PESTEL. (Please refer Appendix figure 0.2). (Murphy, 2018). Political Factors: Political environment may affect not only Lindsay Australia’s long-term profitability or existence in the market or the host country but also the countries who carry on business with the company. The political factors are (Murphy, 2018). · There are new laws imposed in the country related to the business which indirectly affects the business strategies. For instance, the contract law states what the company is allowed and not allowed to do while bringing up new business plans. · High taxes impact the company’s motivation to earn huge profits. · High minimum wages in the country may reduce the profits of the company. · If the company's intellectual property is unprotected, the entrepreneurs may not risk by investing in the company, which results in the threat of new entrants. Economic Factors: Nature and the path in which the company needs to compete are the economic environments. In order to compete, the company looks for a stable economy to achieve possible growth. Since the countries are interrelated in the global economy, Lindsay Australia Ltd needs to analyse, monitor, predict and access the situation of the host country and the situation of the economies in the country. (Hitt, Ireland, Hoskisson, 2016). Economic factors that Lindsay Australia Limited ought to consider while directing PESTEL analysis are (Murphy, 2018). The GDP growth rate in the country directs in predicting the company’s growth. · Countries higher interest rate will increase the number of investors in Lindsay Australia Limited, which would hike the company's growth. · High unemployment level in the country will result in a high availability of jobs than the demand. Hence people would be ready to work for lower wages which intend lowers the expenses of the company. · Economic growth rate. Social Factors: Culture of the society and the method of handling trade impacts the social culture of the organization in the environment. The social factors that Lindsay Australia Limited needs to be considered to analyse PESTEL analysis are (Murphy, 2018). · Expertise level and the demographics of the people: The company needs to understand if the product should be marketed in the country or not. · There should be social awareness about environmental threats in the industry, such as the use of harmful poeticized, fertilizers and synthetic chemicals in all kinds of products (Dixon, David E, 2014). · The difference in Qualification level between the marketers and the target market may affect the company as it may be challenging to understand the interest and the priorities of the target market. Technological Factors: The business has been improving drastically over five years based on frequent transformation in the technology. Lindsay Australia Ltd needs to understand, analyse and adopt the modern technology that helps in success such as emerging varieties of high-yielding grains, and supply of synthetic pesticides & fertilizers, hybridized seeds to farmers. It is essential to innovate the product and overall operations continually to maximise the profits and be the market leader. (Dixon, David E, 2014.) Environmental Factors: Each market differs from environmental ethics. Lindsay Australia Limited needs to understand the standards of the environment before commencing the new business in the existing market. The factors that the company needs to consider before starting are the weather, climate change, managing of waste & recycling, water and air pollution laws and mindset towards being Green. (Murphy, 2018). Increase in tourism and employment opportunities in the country increases the number of migrants, which ultimately affects the air and water quality, habitat conservation that effects the environmental factors. (Dixon, David E, 2014.) Legal Factors: Lindsay Australia Limited may be impacted by the government laws and regulations such as quality maintenance law, health and safety law, copyright law and Anti-trust law. (Murphy, 2018). INTERNAL ENVIRONMENTAL ANALYSIS Lindsay Australia Limited needs to make appropriate use of global mindset to analyse the company’s internal organisation. Which means that the company needs to recognize, analyse and manage the internal organisation to make sure that they do not depend on the assumption of a country and the culture. The company needs to have proper resources and be capable to respond to any competitive situations. (Hitt, Ireland, Hoskisson, 2016). Here the report highlights the main components to analyse the internal organisation of Lindsay Australia Limited. Please consider figure 0.3 from the appendix to understand the structure of the components Resources: The primary source or the supply that benefits the production of the company are known as resources.